It's a pretty crappy reader IMO except there are some advantages and work arounds. Use the Kindle reader app, it has a feature where you can make the background black and the text white, you can further change the brightness of the white text independent of the background brightness, this makes reading books MUCH better. With the kindle app set up right I'd say reading books on the ipad is pretty awesome, the only caveat is the shiny screen, don't be reading when any light is reflecting off your screen or you won't be able to read anything. Reminds me of the commercial with the couple at the beach, one has a kindle and the other an ipad.
Where the crappy experience comes in is PDF reading. You just can't manipulate them the same way you can a regular mobi file, it just seems you are always zooming in and out and adjusting things to be able to read. I have a lot of medical books on PDF and it's a pain sometimes to read thru them straight thru, BUT you cannot argue the advantage of not having to lug around 100 lbs. worth of medical textbooks, and also being able to annotate them and such. If I'm at home and at my desk I'll usually read the regular book instead of a PDF, but if I'm away from my home, or if I'm even just in bed then I will settle for the PDF file.